tv Squawk Box CNBC October 21, 2015 6:00am-9:01am EDT
mcfly travelled back in back to the future two. so get to the delorean, grab your hoverboard, squawk box begins right now. ♪ >> live from new york where business never sleeps, this is squawk box. ♪ >> good morning, everybody. welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin. let's look at the u.s. equity futures. if you have been watching the last three weeks dow is up by 6%. if you take a look at what is happening though there's green arrows again with the dow futures up. s&p futures up by 5.5. it's was a hair raising session in asia overnight. chinese stocks posted the worst
performance in five weeks. shanghai composite was down. it was driven by an afternoon sell off in small caps. weaker than expected trade data added to speculation about more boj stimulus so it's not just here where they're addicted to what the central banks were doing. you can see it taking place. earnings are the name of the game. we'll be hearing from boeing, coca-cola, kimberly-clark and many others. stay tuned, buckle your seat belts. here we go guys. >> lam research buying kla-tencor for $67.02 in stock. that deal valued at $10.6 billion. lam ceo will be joining us tomorrow right here on squawk box. ferrari set to begin trading
today. $52 a share. that's at the top of the expected range. fiat chrysler sold about 10% of its stake in the offering. we'll have much more on the story from kate kelly and the big political story of the morning, paul ryan is going to run for house speaker but only among certain conditions and among other things he said he would only take the job if the entire caucus unites behind him. >> if you can agree to these requests and if i can truly be a unifying figure, then i will gladly serve. and if i'm not unifying that will be fine as well. i'll be happy to stay where i am at the ways and means committee. >> ryan says republican versus until the end of the week to decide if they can agree on those terms. >> what do you think happens. the times is pointing to this as him stepping up but some were -- >> i'm annoyed.
>> you're annoyed that he did that? >> no. i'll get to it. just sit back. you know how bipartisan i tend to be so i will trash the huffington post on any given day. drudge today. king paul everybody pledge your allegiance. dem favorite, obama's new partner. so here we go. >> the beginning of the end. >> no, just immediately it's freedom caucus-type rhetoric undermining, undercutting. he wants too much. i don't know how you heal this rift. he says i'm not giving up my family time no matter what. i'll do it if i can do it but only if i can make a difference. there's a reason because of the 2016 election. if the republicans can't prove some day they would govern why
would you elect him. >> you're going to like hilary and obama by the end of this story. >> no, i have another problem with politico this morning. the story today, biden has a long history of problems with the truth. he's not even running, but here circling the wagons, the hilary wagons. >> he said yesterday he might very well run which you know in-turn gets that camp riled up. >> sarah something or other we got to circle the wagons. >> do you think she was fed this directly. >> no, but they merged with the huffington post, then we can have one outlet to get this kind of stuff. >> interesting though to see politico and drudge each taking these steps. >> it is. >> because i think paul is going to -- paul ryan is going to have a tough time trying to bring all of these people together. i think he's right to lay it out there like he did.
>> i want to think he's sincere. i was willing to step up but everybody wasn't willing to play. >> if he could do it and unite the party he would feel great about doing that. it's a next to impossible task. >> i would assume if you think i like paul ryan and i do, then there's a problem with paul ryan. >> don't ruin him for me. so back to the future two. >> i really like back to the future. >> pepsi perfect they're introducing. >> have either of you tried these new hoverboards. >> they don't even exist yet do they? >> with the skateboard which is only that far off the ground, you can kill yourself. i'm afraid on that and then i've been on those boards out in the ocean and i can't balance myself. >> surfboards. >> no, paddle boards. i've had horrific falls. >> you do it in the bay. >> can you imagine being five
feet off the ground on a hover board? that's insane. >> they're like skateboard overboard. like minisegways and i see kids all over new york city with them. >> in new york city. >> with helmets and some without helmets and i study it. >> they're not hovering. they have wheels. they have those little tiny wheels. you've seen musicians like justin bieber. >> they call it a hooverboard. >> that's not a hoverboard. the real thing is coming soon. it was on nightly news last night. >> you've seen green goblin. those guys knew how to ride a hoverboard. that i don't want to do. anyway, 6:06. >> and we're talking about green goblin. >> and we digress. >> we still have 2 hours and 53
minutes to talk about important stuff. >> which i'm sure we will. >> there's always something behind you and now it's the gentleman's club private eyes or masters of sex. you always have something behind you. >> private eyes gentleman's club. yeah, on 8th avenue. >> it says between 8th and 9th. that's between 7th and 8th i think. yahoo! earnings falling short of estimates. you actually enter between the's current revenue guidance is belocon census. i need comments. i know you have some. this thing is going nowhere. yahoo! announcing it signed a search deal with google but will delay implementation to allow time to review it and we'll have more from an analyst but there's paid whatever it is. they have to pay people to bring -- >> they have to pay people to come to the site now. >> they have to pay more now. >> yes they do.
>> so it's the worst that it's been in awhile supposedly. >> this is a company that is now officially as they say naked. it's a naked company. bringing it -- only because alibaba is no longer there. alibaba is there but everybody has completely xed it out and the operating company. >> how is it doing? >> not so well, thank you very much. >> i just feel like saying chipotle. people mispronounce it. marco rubio. >> i know how to say it. i'm going to show off. shares getting hit hard. latest profits missing wall street's mark. hurt by highest expenses for labor advertising and promotions. 2016 guidance, is it halloween yet? it says there it's spooking investors. we'll talk to an analyst in a
few minutes. a business overhaul shrinking investment bank an company plans to raise more than $6.3 billion in a share offering. >> let's talk ferrari for a second. the company pricing the ipo amid the top of the range. kate kelly is here with the full story and what makes ferrari different. >> yeah, that's a key point that we have been raising the last day or so. so ferrari priced at the top of its range. this was an indication of the strength of its iconic brand. it will raise at least 893 million. so in the neighborhood of 900 to a billion. values the entire company at close to $10 billion. investor sentiment was strong going into this. multiple times oversubscribed to the point where the company ands underwriters consider going public at $83 a share. that would have been
symbolically meaningful in this environment. in the end they went for a slightly more modest price to show a bit of caution and no doubt trying to preserve the opportunity of a market pop in trading today. now there's not a lot of $50 or more ipos. if you go back 20 years you only see a few. alibaba recently $68. goldman sachs $53. google $85. so just the flat price alone here is some what unique. it remains a tough market overall for ipos and 67 ipos year to date. just 35 of the deals this year have priced above the range as ferrari did and finally with $33 billion raised year to date it's the lowest in dollar terms since 2011 one indication of that,
albertsons. they swung to a loss. sales are up. the safeway acquisition helped but it was also expensive. >> simple as race. >> harley davidson symbol is hog. once again, the economy clear here, people that want ferraris can still get ferraris. >> they have a two year waiting list for a product that cost a quarter million dollars which is phenomenal. i talked to one heblg fund whose opinion i respect a lot and the guy said look this is like owning a sports team. it's cool to tell your friends about i don't consider it a good investment fundamentally. they might have gotten benefit from buzz. >> people say you might not be
able to buy the car but you can buy a share. at least you can have that on your wall. >> but this is a time when rich people are still buying ferraris. if it felt like the rest of the company feels you wouldn't think it would be good but luxury goods makers across the board do good. >> i won't go there. >> why? you don't believe it? >> she may approximate saying it's outside of the field of stuff she generally looks at. >> that's what i'm saying. >> you don't think they've done well. >> i think that's fair. but in terms of luxury goods you're right and talking about a multiple here which is high relatively speaking in general but if you look at brands like tiffany it's within the range of what they're getting so it makes sense. >> i guess that is nice.
>> that's great. >> we'll see how it does today in the market. >> do you see the person -- >> a drip of sarcasm. >> do you see elizabeth warren. >> i didn't? >> oh, you didn't see this? >> after taking mary joe white's head off. >> and this person's most famous article is easier said than done. a corporate law theory that will actualize social responsibility rhetoric. a very liberal law professor apparently is going to be -- did obama seed his authority to appoint this person? >> that happened awhile ago. >> i wonder if they had to clear it with joe. he gets the final say on cabinet appointments but he's had a little trouble telling the truth overtime. >> again we digress.
thank you. great to see you. >> nice to see you. >> as we mentioned earlier shares of chipotle down sharply this morning. word from the company that october has been choppy. joining us to take us inside the numbers is senior equity research analyst at deutsche bank. >> thank you for having me. >> is this a fast growing or young company becoming mature and getting into slow sales growth or is there something else happening? >> they didn't necessarily miss on the comps. they missed on the earnings. >> they were up better than the 2.4%. >> yeah so obviously they're up against tough two year comparisons. it was the earnings and they were still a very high multiel stock so missing on earnings doesn't help but the comments about october being choppy is
concerning investors and the question is is there increasing competition. >> we have seen a lot just yesterday subway said it would be moving to natural ingredients too. we heard that from mcdonald's and taco bell. what do you think is happening? >> my view is it is happening and with chipotle they created the market and had it to themselves for a long time and that's no longer the case. while they still stand for things that others are trying to replicate, the gap is narrowing and the competition is getting better at lower price points. >> in terms of what chipotle does there's issue about whether they can force the food properly and people that slam them because of their attitude about the whole thing. does that hurt or do you think that's just noise in the background? >> i think it's gaining steam a little bit. i don't know if there's necessarily that much truth to
it. i think it's gaining a little steam and again-some elements. >> what's a burrito t big one? it's like 800 calories. >> more. we're talking 12 to 1400 calories. >> that depends on the sour cream. >> you get down the beans. >> the metabolism is very high. >> stock is down do you buy r it here? $647. >> it's trading at 32 times this morning's open and it's trading up 16 times. it's not that cheap if there are cracks from that perspective. i'd look from a lower entry point. >> what do you like better? >> mcdonald's. >> we have a buy on mcdonald's. it's been on a little bit of a tear already. >> we initiated in may with a
buy. so it's 95 and change. >> today it's 103. >> thank you. >> i'm blocking this. >> are you reading twitter? >> yeah i have a zero tolerance policy. i'm blocking this. can we send andrew back to october 21st, 1985. >> thank you block that. >> about time. step up. >> thank you. >> it's very irritating. coming up -- give me a second. i'll do this. let's go to break. in an add deal with google the key to the turn around for yahoo! we'll ask an analyst next but here's a look back at this date in history. we're not taking it. my language skills, i've read all of your lyrics. you've read all of my lyrics? i can read 800 million pages per second. that's fast. my analysis shows your major themes are that time passes. and love fades. that sounds about right.
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welcome back, yahoo! shares are down. on the conference call last night marissa mayer said weaker than expected results were not indicative of performance that the company wants. good morning. >> good morning. >> what do we make? is this really a mess? >> the results were atrocious. >> are you dumping the stock? you were beforehand. >> no, i'm at a buy. >> you're still at a buy.
>> the spin off, the new timing for the spin off of the alibaba shares is january. so you want to continue to hold off on the shares until january. >> your gamble is this is all going to happen in a tax freeway. >> it is. they think it will happen that way because they're confident. i have spoken to numerous tax experts and tax lawyers. this is a tax free spin off. >> so your move is hold the stock and then what? >> and then you have to as an investor decide whether or not the core business is any sort of upside to it. i have very little confidence that the stock, business will continue to improve from here. nothing i saw gives me any sort of confidence that the core business will move in the right direction. >> but therefore the company does what? they just live this sort of horrible slow decline sf they sell themselves to somebody?
they merge. they start selling pieces of the business? she does what? >> all is not doom and gloom. >> they can buy back a significant amount of shares. that's one. >> that's not going to help the operations of the company. >> there's things that they can do in term of increasing shareholder value. spinning off japan -- the google search results. >> operationally. >> one positive was the relationship with google and every single expert i have spoken with is convinced that google monetizes at roughly upwards of 30% higher than what you see out of yahoo! so for them to conduct the search result out of google they do anywhere between 10 to 15% if they were to do that. that's a positive. >> do you think that they can cut the costs materially? >> they talked about how they're spending money on tv. they lost $42 million on the
show community and other projects. if they stopped with some of these other things would things get better? >> they talked about focussing on fewer products so my interpretation of that and they'll stop to cut head count. >> big time. >> i think so. with the fourth quarter results they'll give us a plan for 2016 and will include a significant cost production. >> is she running the company a year from now? >> that remains to be seen. it's been over three years. turn around is not anywhere in sight in my view. the end game for yahoo! i think ultimately yahoo! gets acquired either by private equity or traditional media company. i think that's their exit strategy. >> we'll leave it there. thank you. >> thanks. >> our next guest works for a team of analyst and think what we went through this year, the slump makes it more promising
than a year ago. joining us now is portfolio manager. it's better that you're seeing more both here and abroad because we had some volatility and weakness in the market. that's not your thing, macro calls. >> we do have what it makes it very different. the 40 billion dollars that we manage for mutual funds. we have fundamental and quantitative investment fused together so we're looking from a top down perspective at markets and finding some interesting in eastern europe and others frightening. some of the economies or places such as south africa or latin america and we're trying to be under weight versus benchmark. >> how much really great undervalued stocks do you have?
because we're going to talk about three. do you have like a dozen. >> more now than the last three years. >> how many of them are in the united states? >> almost half. >> half. >> or other place. >> yeah, yeah, what is so exciting now about investing in equities, that i couldn't have said even six months ago is that now pe multiples are falling, investors are getting nervous about a fed rate rise and those great companies are still there paying the dividend yields we need more than ever. half of them are broad and half the ones we find that are really interesting are in the u.s. >> two of them you're going to talk about, one is samsung, right? because of the phones? because of the tvs? what. >> the reason why now is corporate governance. samsung is part of a gigantic
conglomerant in south korea but what makes it so interesting is there's a change of regime. the younger generations taking over at samsung and likely to return more capital to shareholders and the reason we care now is interest rates are so low and we might have a minute prize sometime in the near future but they'll be very low in europe and asia. would be of the reasons the japanese markets rallied today is expectation of more expectation of enormous reasoning. they can grow their chip business. this is of great stock. >> i have to love their tv. people who thought they were going to be replaced and panasonic and suddenly most people have --
>> i'm still on plasma because the blacks are blacker. >> plasma. >> blacks are blacker. >> hatachi and qualcomm too. >> yeah. now i never thought, i would be talking about them in the public forum, the chance would have been zero. they pushed the return above single digits. >> down this year and off 26% in the year to date. >> in y nerks terms off 25% of the last 12 months. >> okay and then real quickly on qualcomm down that's 20% year to date. >> just as bad. that's what value managers are going to bring you but one of the reasons -- these are great companies and very large cap. you think you do well and people would understand them. >> there it s. thank you. >> very much. >> what's causeway stand for? >> our name comes from the
giants causeway in northern ireland about 50 million year old array of columns. >> cool. >> built to last in other words. >> i hope so. >> thank you. >> when we come back this morning the biggest loser in oprah's weight watchers buy. here's a hin. they're short. plus take a look at yesterday's s&p 500 winners and losers. we'll be right back. ♪ proud of you, son. ge! a manufacturer. well that's why i dug this out for you. it's your grandpappy's hammer and he would have wanted you to have it. it meant a lot to him... yes, ge makes powerful machines. but i'll be writing the code that will allow those machines to share information with each other. i'll be changing the way the world works. (interrupting) you can't pick it up, can you? go ahead.
. welcome back, everybody. we're on tv. we're in chairs talking about the stories that caught our attention and you all heard about the weight watchers story the other day. oprah winfrey, obviously in full form. when she got into this stock it took off. up 100% just on the day that she announced she was taking a board seat. that she was taking a 10% stake in the company and you know who got crushed on this, this is interesting to see. i saw this in the wall street journal today turns out that short sellers make up about 2.8% for the avrerage s&p 500 compan. do you know what percent of the stock was short sellers? 57% which is why the stock went up so much. but good for weight watchers. >> i wonder what the short story was on it? >> must have been a good story. >> it struggled for years now. >> there's other things.
>> post financial crisis people say. >> there's competition. >> there's a couple of others. >> i know that everybody has opinion and when you have 57% of your company being short sold i like to see a good squeeze like that. >> you don't like short selling? >> i do like them but not when it's 57%. >> some of them it gets higher than that at times too. it can get 80 or 90. so what we didn't mention, we hear hewy lewis obviously. >> back to the future 2. >> back to the future 2 ♪ >> that was the second one where he went forward. everything was going along fine for the cubs because you know that the cubs are supposed to win and it was 2015. at least they got that they made it this for. the movie hasn't been right
about a lot of the things. i a lot of the other stuff hasn't happened yet. it always seems longer in 1985 but now it doesn't seem that long ago. >> you thought you would never see 2015 when this movie came out. >> i'm still talking about a hover board with wheels on it. >> i don't want a hover board. >> i like the hologram. this is jaws. >> so that was a good call. i'm worried about the cubs. you saw this guy hit another home run. >> 3-0. mets are up 3-0. >> he has at least so one more game. at least four more games. the record is 8 home runs in post season. so he has at least four games. >> this guy single handily changing the definition of
murphy's law. >> he is. i had the early call but this is still going to be great and if the mets do win the royals are kicking butt too. 14-. 14-2 over toronto. >> i'd like to see the cubs win at least one. >> and we should talk briefly about star wars. star wars premieres. you're going. you're not going. >> to the premiere. >> no, i'm just saying when it comes out. it comes out december 18th. >> i loved the first three star wars which were 4, 5, and 6. >> the story was the tickets went on sale. every website that sales tickets went down. like stopped watching. >> that's going to get me back. hans solo shows up in this one. harrison ford. he wasn't in the last two. >> this thing is going to bring back $5 billion in revenue.
so talk about a business. >> harrison ford. >> you have a thing for him. >> love him. >> you want to get in on it early. now some people have offered their tickets on ebay. >> i don't want to see it that bad. >> $10,000. two tickets i think. 10 grand. do you want to go in for it. >> wait for it on demand. >> you can't watch star wars on tv. >> go to an imax and see it. >> coming up, sports fans might be worried when squawk box returns. we'll talk about it.
they're investigate wlg the business model behind daily fantasy sports firms violates federal law. this coming according to the wall street journey. the new new york federal prosecutor shut it down just four years ago. watch for that. tonight don't miss an all new episode of jay leno's garage. he's on a mission to find out why people loved cars. he connects with krflt j. wilson and lawrence fishburn. >> we got the mustang and this is the gauge here. this is miles per hour. >> rpm. are you ready to hit it? >> yeah. >> are yll right chief, hit it.
>> we hit 194 at the red line. >> he can still let some more rpm to go. let me double check that. >> you can catch the entire show of the new jay leno's tonight. you can do that 10 eastern time. >> coming up, larry sommers and neera tanden are ready to sound off on the issues that matter most to workers. check out the price of oil. you're watching squawk box on cnbc. first in business worldwide.
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our next guest. she's the president for the center for american progress and larry summers is the president ameritis of harvard university and former treasury secretary under president clinton. we heard this concern about short-term and corporate leaders out there. what about the center for american progress. why are you so interested in this topic? >> we're concerned that a lack of business investment translates to a problem for wages and jobs. business investment is where we get an expansion of jobs in the country and when there's fewer and fewer jobs there's not enough wage pressure so focussing on why we have this conundrum which is that we have corporate profits at hi toic highs and business and investment is at a historical average over the last 15 years and we have long-term
productivity we need to see greater business investment. that's why we're focused on these issues. >> let's talk about that problem. it's an issue that confounded a lot of people although you see companies doing things like buying back shares and make ago quiz situations rather than reinvesting in their companies. what's going wrong? >> she is right. the country needs more investment in we're going to grow this economy. the biggest single reason why companies don't invest is that they don't have demand for their products. we're caught in a vicious cycle. incomes are too low and investment is too low. too few pop are working and incomes are too low and we have to get out of that cycle. doing things that motivate, investment by companies, the right kinds of tax reforms for example. the right kinds of changes in the rules that make activists, some activism is good but rules
that discourage the activism that strips the cash out of companies these are changes that would be important and critically long-termism isn't just about the private sector. it's about the public sector as well. >> sure. >> we haven't spent less on infrastructure and public investment as a share of our income since just after the second world wand' with have an unbelievable opportunity with the low interest rates we have now to invest in renewing america and public investment would crowd even private investment on a substantial scale. >> if you look at what happened even with walmart, it has to be more than the private sector that does this. they're the largest employer out of the chinese army and department of defense. it's talked about raising the minimum wage at its own company but this stock has been punished pretty severely for investments they're making at a time when
sales are flat. >> there's a lot going on and the crucial thing is that sales are just as you say, sales are flat. we got to find a way to raise income so we raise sales and make those investments. we make those investments profitable and necessary but the key is that you've got to have demand if you want companies to invest. otherwise they're investing on something they don't need. >> i'm going to ask the same question. i have written about it and all talked about it. the need to get away from the buy backs but ultimately if you're making a decision in a business case to invest you want to think you can get something for your money right now and most ceos don't think that. >> i think for me, andrew that
goes back to the question of stimulating demand but we also do have situations where ceos are confident and believe that by doing r and d they are making transformations to their company and their stock for investments by pressures from activists in some ways, the rules are tilted in favor of those activists, some of the changes that have taken place in the markets have not been adjusted to in our rules, and that's something that the sec, the financial authorities need to be looking at if we're going to get enough public investment. >> look, i would -- >> and private investment. >> yeah. i would just add to that that, you know, we do have a problem when 55% of the financial executives say they wouldn't make an investment if it affected their short term, their quarterly assessmenassessments, you know, i think larry's absolutely right. we have a challenge of public demand, but at this time, it is
particularly worrying if the ceos of companies are not making they are foregoing long term investments good for their companies and good for our economy at large because they are so worried about the quarterly assessments that should be taking this into account, but, truly, really can't. >> you know, larry, there's -- you said it's a cycle, and isn't this a cycle? the chicken-egg argument. people say, admittedly, we need help with demand after the cris crisis, but now say the weakness in demand that you talk about is a result of the zero interest rate because people are doing thing that they wouldn't normally do, what we already talk about. maybe, you know, if -- it starts somewhere. i don't know where the lack of demand starts, but if companies at this point find it much more lucktive, you know, to buy back their stock, and normally, they do not do that. if they are pushed to do that
out the risk, maybe that's part of the reason the demand is weak in the first place. we are bag to where we started. >> there's no economics that suggests that by raising interest rates you're somehow going to increase the level of demand. by raising interest rates, it's more costly to borrow, invest, by raising interest rates, you raise more -- >> savers have no money. you worry about consumers. a lot -- maybe they're investing in things they shouldn't either because they can't get ye, and, therefore, no demand coming from half the population. >> joe, you can't have it both ways, you think that zero interest rates are pushing people into riskier investment, they are contributing to 120 unicorns and all of that. that -- whatever else unicorns
are, they are long term investments. nobody's buying because they think think get cash out tomorrow. so i think the evidence is, and i think this is something that all economists would agree on, that low interest rates, other nings equal, raise the present value of cash flows in the future and get people to take a long i remember ter view. i think the real question and question here is coming back is is it enough? we've done what can be done with low interest rates, and that's why there's other areas of policy to look at. we have to look at, as i emphasized, the public investment side, emphasizing giving management that want to make long term investments, where the market would basically like it over time the scope to do that. you know, the problems are not -- they don't have single
causes, and there's not single solutions to them. that's why i think the conference that the colleagues are sponsoring today are trying to look at a broad range of aspects of this is so very important. >> well, if there were no negative ramifications or consequences for staying at zero, why ever have an interest rate then? i mean, just to say absolutely there's no dislocations or, i mean, if i were -- >> joe, the reason -- >> if i were a ceo and knew i could buy back my stock with 0 interest rate, reduce the float, and put the price up where the options kick in, why would i invest in plant and equipment if i could do that? i couldn't. >> the plant equipment generates substantial profits that had a high present value calculated at that 0 interest rate. >> they are not doing it, though. >> they are not doing it because they don't see the profitability of the investment that comes
back to overall macroeconomy. when should you pick up interest rates? as has been true forever, when you have an inflation problem. the problem we have today is that even looking out ten years markets are expecting little more than 1% inflation on the index that the fed uses for inflation, and that's the reason why there's so little energy. in the face of a low inflation problem, no need to rush and raise rates. >> who gets the hundreds of billions of dollars that savers are not getting? where does that end up? that savers are missing out on? >> ending up to the benefit of borrowers, contributing to record high automobile sales. it's contributing to in the face of a variety of challenges, the housing market is stronger than
otherwise would have. . it's contributing to corporate cash flow enabling more investment than otherwise would take place. let me tell you, the idea that you can make a case on other grounds having to do with financial euphoria, something like that, for raising rate, i don't buy it, but i understand there's a case. the case that raising rates somehow stimulates business investment, economics. >> you see joe biden said, 17 people, out there, like, 17 larry summers. that made me mad yesterday. did you see what he said? what he saying, exactly? >> oh, well, he was noting that we economists see two sides of questions, and we're proud of that. >> you don't see my side. you never see my side. >> two sides, and then there's your side. >> some things are over the edge, joe. >> thank you for joining us. appreciate it.
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earnings alert, reports due from gm, kimberly, and boeing. we have an interview with kimberly clark, and under pressure, yahoo! trading lower after disappointing results. the story behind the stock moves straight ahead. >> leg organization s factories run at full capacity, but the company warns of a possible brick shortage ahead of the holiday season. >> introducing the double decker couch so you can watch tv together and be buddies. >> that's literally the dumbest
thing i've ever heard. >> i'll handle this. that idea is just the worst. >> we'll tell you why as the second hour of "squawk box" continues right now. ♪ from the beating heart of business in new york city, this is "squawk box." >> welcome back, first in business worldwide on cnbc. it is back to the future day today. it's october 21st, 2015, remember that's the date that went into the delorian when marty and doc brown and jennifer parker traveled back to the future. in the second one, they went to
the future first. >> it's complicated. >> time can go both ways according to -- it's very confusing for me. butterflies flapping wings. >> in africa. >> exactly. >> theaters across the country are showing the "back to the future" trilogy today, and maybe a couple -- i didn't like the third one. >> there was a third one? oh, the wild west. i forgot about that. >> did you really? >> yeah, completely. i never saw. >> it was forgettable. >> i remember the cowboy hats, that's it. >> it was forgettable. >> it was like a villain -- >> oh, right. >> you never saw "star wars," but saw "back to the future 3 "? >> a couple times. ride service, lyft, is offering rides in new york city, and pepsi perfect, the fictional drink featured in the movie, and the other big prediction that
the zig cubs would win the world series is still possible, but -- >> you think it was such a cultural phenomena that everyone remembers all of this stuff. >> we just think it's cool it's happening -- >> the companies that decided to actually, you know, leverage the day. one thing for us to do it, but it's another thing to sell product based off of it. >> yeah, but the first one was great. >> yeah. >> fell out of a boat, had the vests on, and goes, is there a pepsi? you got to pay for it, kid. free pepsi? there were good lines, right? >> very much so. >> all right. let's talk about the other top stories at this hour. a selloff in china stocks overnight. the shanghai composite posts the worse one-day performance in five weeks, led by a sudden bout of selling in small caps and technology and media sectors as well. the shanghai composite dropped by 3.5%, and the smaller
shenzhen fell by 6%. this morning here, things are looking better for the bulls, dow up by 45 points above fair value, and s&p up by 5, and nasdaq up 15, and the dow picked up 6% in the last three weeks. if you want to look at the individual shares and how they are trading today, chipotle's hilt hard. latest profits below what the street had been expecting, hurt by higher expenses for labor,tizi labor,tizilabor, advertising, and promotions. the guidance is spooking investors. the stock down by 8%. if you're talking about the same store sales, they dropped precipitously, up by 2.6%, better than the street x.ed, but a year ago, sales were up 19%. >> also, deal news this morning, semiconvict maker, lamb research, is buying core for $67 in cash and stock, a premium of 24% to yesterday's closing price. the deal is value at 10.6
billion. the ceo is joining us tomorrow morning here on "squawk box." >> ferrari at the starting line. the luxury car maker ready to die bu on wall street. we have the price and details, kate. >> hey, becky. poised to trade under the ticker symbol, race. they had an optimistic $52 a share, top of the country's 48-52 range, and a real sign of optimism for the name. the luxury car maker set to raise at least 893 million and closer to $1 billion in and when an option for underwriters purchase additional share is exercised. documents discussed low volume creation strategy, carrying an ora of scarcity to the product, and they followed the same playbook, small sized offers to begin with, 9-10% of the overall shares, and, already, investors moan about what small allocations they got, starting yesterday with the phone calls that i was making, especially since the stock seems ready to
pop in trading today in the short timers could be selling it for a fast profit in the aftermarket. they expect a 9-10% net revenue result for the third quarter and ended in late september, and a big jump in net profits all proceeds go to the parent company fiat chrysler as part of the ipo. by the way, do you know where ferrari north america is based? down the street from here. >> small world. >> we borrowed them one day. >> is it a sweet ride? >> i was too afraid to drive. >> i drove andrew. >> to drive a standard or make them automatic? >> i did drive it. i was really afraid, but yeah. >> didn't want to hit something either. >> this is what we did.
not that one. that's another one. >> wow. amazing. >> so handy. all right. that was joe? >> yeah, there was joe. >> nice. >> you can't tell, but we are -- there's a lot of g forces. >> especially when you took turns. >> i was. >> your voice was high on that one shot. >> it was scary. >> we drove around a little bit. >> we did. >> so where was the crew alongside you with a camera? >> yeah. >> running. >> no, kidding. >> we had go pros. >> hovercrafts. >> we had go pros looking at us. >> nice. that is cool. >> years ago. >> you guys know where they are based. >> we do. >> we'll see what they do today, some predict 60 bucks, but, you know, i don't want to be a booster for the stock. we don't know. >> do you remember when he woke up in leah thompson's bed? >> i do. >> do you remember what she said? >> calvin.
>> because of the underaway. >> yes, people would now call you tommy. >> that's right. >> the greatest underwear ever. >> i was thinking tommy hilfiger. >> i'm not wearing them right this second. >> how many pairs do you have? >> just one pair. i have other pairs -- >> you're not wearing them now? >> not the ones i wore yesterday. >> we're going to get the guy back on here. i want to get you a pair. >> just in a nutshell -- >> in a nutshell -- [ laughter ] >> did you accidently say that? >> i can't explain -- this awkward moment has been brought to you by joe kernan. >> you know you can't endorse products? >> they are just so light and somehow -- >> supportive? >> that too, and the most comfortable -- >> soft? >> i can't explain it, but if you try -- also, they do undershirts too. >> boxer briefsing right? >> amazing.
i can't get over it. >> all right. >> thank you, kate. >> thanks, kate. sorry. okay. we're going to have a serious conversation now with the blackstone president and coo, tony james, speaking at the center for american progress conference focused on long term decision making, unveiling the proposal to tackle the retirement crisis in the united states, favors replacing the 401(k) with a guaranteed retirement account. tony, thank you for sticking with us while we talk about things that maybe we shouldn't be talking about, but nonetheless, let's have a serious conversation about this because you have a serious proposal on the table. begin by trying to, plain what the guaranteed account looks like. >> okay, well, i think we have a looming crisis in america, which no one's really talking about. it's one of the things america's not good at dealing with, very long, slowly unfolding crisis that are -- that are not going
to be a problem tomorrow or the year after, but they will be a huge problem for the generation of people in their 20s and 30s today. the problem is they rely -- social security alone cannot provide enough for these people to attain their standard of living in retirement. if we don't do something, we're going to have tens of millions of poor people and poverty rates not seen since the great depression. >> the -- so -- >> so the plan is we have to encourage people to save and save more. right now, they can't save because they have stagnant incomes and heavy student loans. we have to mandate savings, rolled all the other plans, all the iras, 401(k)s, everything, that really don't work for a lot of reasons into one plan. everyone saves 3% of the income. that would be 1.5% of the income from the employee and 1.5% of income matched from the employer. the key to that is -- that's a
much lower -- 3% is lower than people think. the key to it is taking the capital, setting up the guaranteed retirement accounts, and investing for the very long term. it's that -- earning those returns which underwrite a lot of the retirement savings gap, but we have to do that professionally. >> tony explain this, though, who guarantees the return? i appreciate it's in the market, but the market, as you know, sometimes works but sometimes it does not. >> absolutely. so part of the proposal is the federal government just guarantees a 2% return, it doesn't get people there, but protects those unlucky enough to retire when the market tanked. the 401(k)s today earn 3-4%. pensions earn 7-8%. the trick is to having thes invested like pension plans to money compounds over decades at 7-8%, not at 3-4. the difference between compounding rates is bigger than people think.
for a 25-year-old saving $1,000 a year, if she gets 3-4% a year, when she retires, that's $75,000 in savings, not near enough to live on. invest 7% a year, she'll have $200,000 in savings, three times as much. that's the power of compounding, and that's what we have to do. >> tony, where are you investing the money? straight in the target? putting in private equity, you're a beneficiary? how does it work? >> yeah. i think that's a very fair question. i would invest like pension plans, and average pence plan in america, 25% invested in real estate, private equity, commodities, hedge funds, that stuff, and 75% is invested in the markets. >> though, most -- tony, northeast 401(k)s at this point, through the corporation, stocks, mutual funds, and potentially some bonds, that's about it. >> yeah. the 401(k)s earn 3%, required by law to have basically total
liquidity. pull the money out too early, they don't now how to anewtize it at the end of the day. they don't save enough. they invest in stocks and bonds that are liquid with high administrative costs. >> they only only earn 3%. >> tony, while we have you, broader for a moment, just getting your economic outlook on where things stand. how you're looking at the economy begin that there's been a lot of questions, frankly, about whether we're continuing to grow or not. >> yeah. we see the u.s. economy as continuing to chug along at 2 .5%. there are, clearly, at the corporate level, the s&p earnings are soft, but a lot -- there's some head winds there, the strong dollar, currency translation losses and so on, and so the economy is -- corporate earnings are slow, but at the same time, we have great advantage in terms of energy costs. we have the construction cycle turns up, but we think the u.s. economy's solid at 2% growth.
>> blackstone had a loss of net income in the third quarter, but you say that masks what's beginning on in the long term. what do you mean by that? >> so our business is -- we don't have to sell in the stock market at any one point in time, so there's no -- where stock is today is irrelevant to us. we -- so how are we doing? gathering assets under management, investing well, underlying companies grow earnings at 9% a year. that's pretty darn good, and that accrues value. we'll get the value when we sell ultimately. today's stocks bounce around. it's not a question of where stocks -- it's a question of where stocks are in the last day of the quarter. that determines the mark. not where they have. where they are going, or anything else. >> tony, most importantly, people have questions on china. you know china better than most, one of the original investors in blackstone, your sense on where
that economy is right now? >> people are too worried about china. there's no hard landing in china. you know, the percentage growth, china announced 6.9% growth, precise numbers in china are not really meaningful. it's more directional. we think china is slowing, but it'll be fine, chugging along, pivot to the consumer, they should. they talked about that ten years ago. they actually didn't make progress, and now it's starting to happen, and that means that the consumer sector's doing well, and we see that in the malls and consumer products companies there. the more industrial infrastructure sides are slower, but it's a shift in the economy. markets are spooked, but the economy, itself, will be fine. >> you guys getting stocks in town? >> i think we'll have a great investment, and it'll be great for the city. >> can you quick make the money back quickly without raising rates? i don't understand how you can do this. >> well, we're not trying to
have a quick flip here, but we expect to hold this maybe forever like they held it for 40-50 years. it's in a vehicle with permanent capital and hope to be great stewards for a long, long time. this is not a quick flip asset. this is taking care of an at success which is important to the city, and accruing more modest gains for the lps over a very long period of time. >> leaving it there, tony, appreciate the time this morning. thank you. >> thank you. >> good luck with the conference. >> thanks. when we come back this morning, yahoo! missing the mark in the third quarter and cutting fourth quarter guidance as well. the stock down 35% just this year. josh lipton is joining us next with details. general motors and dow and coca-cola set to report at 7:30 eastern time. it's going to be a scramble, but we'll bring you the numbers as soon as they hit. plus, first on cnbc interview with gm ceo, chuck stevens.
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disappointing guidance on the conference call and seems to suggest that a big reorganization could be on the way. >> we see a unique movement, an opportunity moving into 2016 to narrow the strategy and focus on fewer products with higher quality to achieve better growth and better results. we will share the details of the plan in which we aim to delineate focus, improve execution, and define our relevance to users in the next earnings release, if not before. >> now, some of the keys to the quarter, dismy revenue, excludeing traffic costs, growing 2%, and video, nativing and social ads rising 40%, though that was slower than the growth we saw in q2. they are taking steps to strengthen that search business. the company announced a new
partnership with google under the agreement they send select searches to google, then paying yahoo! a percentage of revenues of ads displayed on yahoo! properties. that will be deviewed by the justice department. she said they are still on track for q4, times, she said, may slip until january. guys, back to you. >> okay. josh. thank you. go back to bed. go back to sleep. >> wow, it's early. >> huh 4:21. >> yeah. coming up, international news star, pit bull, in a new special in the business ventures outside the world of music. a sneak peek of that and more when we return. time now for today's aflac trivia question. when was the last $2 bill issued? the answer when cnbc's "squawk box" continues. aa-flac!
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welcome back to "squawk box" this morning. for pit bull, it's not just music and endorsement deals. the miami born is taking things a step further, becoming a business owner and ventures outside the world of entertainment. >> i feel that with the brand to be able to become, creating the leverage, become partners in different products and learn different trade, wow, this is like -- i'm living my own university, but a partner in. >> teaching himself well, oer s operating as an executive in restaurants from miami grill -- >> it's such a legendary spot here in miami. i used to write rhymes in miami so miami's dream exploded in america. >> to the fragrance business with his self-titled product line. ? starting at perfume media and then sears, to target to walmart. >> to the spirits market. >> when you look at business opportunities, what does it take for you to say, okay, this is a
good one? >> to be honest p you, the first one is person i meet. if it's business, i don't care if it's a million billion dollar business, but i don't need a multibillion dollar headache. >> see more of the special featuring pitbull tomorrow at 10:00 p.m. eastern and pacific. >> michelle is joining us tomorrow for another look too. interesting guy. going to hear more about that. >> and coming up next, a flood of quarterly results hitting the tape in a couple minutes, including gm and boeing. those numbers and analysis when we back.
center at this hour, shares of arm holdings rise, chip designer posting profits in line with expectations offering an upbeat outlook. they power, of course, the iphone. the ceo is stepping down at the end of the month for syngenta, under pressure after rejecting an offer, and some say the ceo departure could spark deal situation. watch for that. and intutive surgical. they are benefitting from an increase in surgeries themselves. >> looks like we have earnings now, phil lebeau is here. >> let's do gm then boeing, both, by the way, beating by a wide margin. gm, earning $1.50 a share, above the estimate, and revenue stronger than expected at 38.8 billion. by the way, that's excludeing 1.5 billion in settlement charges related to the ignition
switch, a profit, record operating margins of 8% a year ago. they were 5.8%, but here's what's going to get a lot of attention today. north american record profit for the quarter of 3.3 billion, and the margin, 11.8%. i'm not sure i can ever remember general motors talking about margins up above 11%, and now for the year, they expect to have full year operating margins in north america at 10%, a year ahead of schedule, quickly talk about china. profit of 463 million, and mar gyps better than expected, that's because of the mid shift going to suvs and luxury models. europe, 200 million compared to 400 million. boeing beat the street by a wide margin, earning 2.52 a share in the quarter, 30 cents better than expected, revenue a billion better than expected, the
precash flow, coming in at 2.3 billion dollars, and boeing is raising its full year earnings guidance. they were down at 7.70 to 7.90 a share, but now coming to where the street is between 7.95 and 8.15 a share, a raise of 25 cents. revenue, raised by 500 million to 95 to 97 billion, cash flow up to 9.5 billion, and deliveries up to 199 as an increase of 13 and raising their guidance full year deliveries by five airplanes to 755-760. >> beat by more than they raised, right? >> they did. >> it's not a raise, just -- >> well, that is how boeing does it. you know that. >> i know, but -- >> yeah. >> so we talked about it in the past. we look at 4x with boeing? >> correct. >> the others are fascinating. coca-co coca-cola.
down 5%. right? revenue? >> revenue down 5%. >> up 3 organic, but they managed to beat anyway. >> global volume up 3%, adjusted earnings versus the 50 street expected. revenue below, lower than expectations seen, 11 .45 billion the estimate, came in at 11.43 billion. global volume up. guidance for the full year, in terms of a come parnl currency neutral earnings per share, growth of 5% saying that's in line with the range they have in the beginning of the year, street looking for 2.01, down from 2.04 earned last year. look at the numbers again, and just in terms of the currency and the impact that has, did they lay out the impact? >> like 8 -- i looked at some others, and sometimes you subtract. >> resulted in a 12 point head
wind on comparable cooperate income. >> plus three plus minus five, right? it was plus three organic. boeing's weird, phil, isn't it? things are so big, they say take so long to make, i don't know why they don't know what the company's going to make every quarter based on how many deliveries there are. >> right. they've been increasing deliveries. >> people don't know? >> they know. they know to an extent. i think the pace of increases in terms of the deliveries, a little bit faster than some people expected. >> what determines that? weird. >> the efficiencies they are driving out of the system. >> and -- >> must be complicated. >> and if you look at what nay are doing with the plant in south carolina, in terms of 7-8 deliveries, that's an example of -- they are driving those first ti efficiencies through the production line. >> beat by 30, raised by 25. where are we on xm now, do we
know? >> xm bank? >> that helps boeing. >> it does help boeing, helps a ton of companies, and everyone you talk with who knows the benefit of xm says it's ridiculous it's not been extended. having said that, we thought by now, you know, it would be extended. it's not. that's not just republican or democrats. >> there's a movement of republicans in the house who say this is corporate welfare. >> you're right. i understand that. if you don't have it, other countries have their own form of xm. >> unlevel playing field. >> yep, exactly. >> i don't know. i know. you laugh when i ask you. i don't know why. >> i laugh because it's -- >> because it's crazy. >> it's crazy. it's -- let's tie an arm behind our back now in order to see -- >> our greatest export. >> right. >> phil, thank you. >> we have chuck stevens coming up from gm. >> in a bit. >> yep. >> meg is back at the headquarters with breaking news
from biogen. >> a lot of breaking news. first, the third quarter numbers in at 448 per share, on revenue of 2.8 billion, topping analysts estimates of earnings of 3.830 a share versus 2.65 billion. they modestly raised guidance for the year. this comes amid news that it will cut 11% of the work force in restructuring design to save $250 million annually and shuts down some development programs. the company separately announcing that a phase three trial of a drug failed in a form of multiple sclerosis. the shares halted now. they should open soon. a beaten rate for the third quarter, but news of restructuring cuts 11% of the jobs, becky, back over to you. >> thank you. we have to mention shares of kimberly clark, joe, you mentioned impact of foreign
currency. kimberly clark has numbers 1.51 versus the 1.49 expected. revenue better than the street expected. >> down 7% from last year. >> down from 5.42 billion. they say the exchange rates reduced sales 12%. >> they were up five organically. >> right. massive head wind. >> they make diapers. >> which you need. >> across the board. which what? >> which you need. >> i don't need those. >> i don't mean you -- >> that was cruel. i don't. >> you don't need diapers. >> i thought about it. >> yes. i didn't mean you, but a necessity, not -- >> you said you need those. i don't. there's a bunch of others -- like absorbent products. >> depends. >> depends on what we're talking about. oh, there it is. there's all the stuff they got. a lot of, you know, a lot of
people -- i mean, ageing is a bitch and people have incontinen incontinence, men and women, and they sell a lot of that stuff, wearing liners, and all that stuff. >> again, to your point, you think of the things you pay up for. these are not luxury items. >> andrew, does your tommy johns have a liner in there just in case? >> no. they are great, though. probably can get them with a liner. >> ruined it. you're ruining it. >> that ruins your nutshell? coming up, the squawk ceo says the ceo joining us next to talk about the company's quarterly results released minutes ago. hi watson. annabelle, your birthday is tomorrow. i'm turning seven. what did you ask for? a princess. and a pony. you like things that begin with p. i like pink frosting too. will you have a cake? yeah. i was too sick to have one last year.
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welcome back, futures in the green, dow set to up at 68 points higher, nasdaq up 18 points, and s&p 500 up 7 points. deal news this morning, western digital buying sandisk for $86 preponderate 50 a share. they have. rising in the past few days on words they were in talks. that deal all in, 19 billion.
>> we were talking about kimberly clark posting results moments ago, beating estimates by 2 cents, and raised full year guidance, the consumer products giant owns kleenex, the best known brands illustrated there. talking us through the quarter is tom falk, chairman and ceo of kimberly-clark. not everyone thinks it's exciting, but the stock is exciting, up like a lot of stocks that we watch, is the defensive nature of kimberly-clark coming back, you're almost at a new high. >> well, joe, we make the products that mom needs every day to care for the family, and so as income grows around the world, more consumers are in the middle class. they are needing to buy products like diapers and bath tissue, feminine care, and depend employs. >> we were talking about that.
everything's absorb sent. everything absorbs something, tom. >> we got you covered, joe. >> stop that. that's what becky covered. because it's a three-hour show? i can leave. we have breaks. >> actually, joe, i saw you in the ferrari earlier -- >> needed a diaper there, that's right. >> if you go on a road trip, you know, you could probably use them, make a quick pit stop to keep going, you're in good shape. >> i guess it depends on what you have to do. you hear a lot of that. tom, tough currency head winds. for you, you were, what, up five, but overall, organ ceoly, but overall down 7? >> correct. >> you can't add it up, but that's 12%. >> well, it's multiplied to the bottom line. that's just the translation effect on sales. it's probably a 30 point drag on that income because not only do we have the translation effect in many of the foreign operations, but buying raw
materials that denominated in dollars, so super absorb bent are dollar based. that effect is multiplied by two and a half times at the earnings per share number. that's a big deal. you know, it's changing the shape of the pnl in some cases, but i'm really proud of the results our team's delivered getting good organic growth, good market share growth, innovation in the market, and so we're winning in local currency and, you know, hope to translate into a dollar result that our investors are happy with. >> and, you know, market share gains are nice against competitors, and, i guess, that comes from innovation, and you want execution and to rationalize costs and that stuff, but, for me, i want to sell to some of the countries that still don't use diapers on their kids, and, i mean, you're talking about billions, i think, or maybe not -- >> absolutely. >> but talking about -- do you need to change -- do they need more disposable income or do you need to change just the whole notion of how you raise, you
know, babies? i mean, it's cultural too, isn't it? not everybody thinks you need a diaper. >> you see that mom wants the best for the baby everywhere around the world and seeing the super premium part of diaper categories grow in china, brazil, russia, moving into africa, mom wants the product to keep the baby dry overnight. they get 12 hours of sleep. they start it there, and them as their incomes improve, they want baby wipes and they'll move into other parts of the categories, and so, you know, as we see, incomes improve. china's economy's growing at 7%, but gdp per capita increases faster because of the low birthrate. we are seeing good growth in the emerging markets continuing. >> do you know -- you must -- take all the babies in the world, what percentage are in disposable diapers, do you know? >> you know, there's a high percent in the category, but in some markets, a mom uses one diaper a day, uses it jovernigh,
and they use cloth or in some cases, in a warmer climate, they don't wear anything during the day. in the u.s., moms use five or six diapers a day, and so most moms are aware. you find the product exists, but they are not in the category as much as they'd like until incomes improve. >> tom, we try to figure out the u.s. economy, the global economy, and you have a good idea what's happening, obviously, not every product you sell is directly tied to an economic shift, but you have to have an idea what's happening. >> yeah. >> economics this morning suggested railroad car orders were down, and i just wonder if that's something that you've seen? any weakness in the u.s.? weakness around the globe? >> no, actually, we're optimistic about the consumer at this point in time, and so as we look at the u.s., the birthrate's up this year for the first time in a long, long time, since the downturn really, a sign of consumer confidence, household formation, lower
unemployment unemployment, those things gets you confident in expanding your family, and so we're seeing the diaper category performing better than has over the last several years. we are seeing categories in the u.s. that are dependent up double digits, so as we are ageing and living longer, you're seeing a continued growth in those spaces, and the super premium parts of the categories grow at a faster rate than the main line category. if you shift to a market like brazil, having a huge economic shock, 60% currency devaluation year on year, the b2b side of the business is under pressure, but consumer business is up double dimts so far this year. with are still seeing, you bring innovation, you got good products that meet app essential need mom is willing to invest in those categories. >> baby wipes are good. >> are excellent. >> a lot of uses for those. taking makeup off.
you gave me a weird look. >> they are. we get letters from consumers about different things, they are great shoe shine wipes or they are good for taking stains out of furniture. i think a statistic in the u.s. about 70% of the households that have baby wipes in them do not have a diaper aged child in the house. they used them, and they have little children, and then as kids grow up, they find other things to use them for. we're happy for them. >> lots of uses. >> i don't know if you should use them on your face for the makeup. >> i do, joe, it's great. >> it's you with this -- >> why? >> you guys probably make them too? special makeup removers? >> we make special makeup removers, yeah. >> okay. all right. you can afford that stuff. >> if it's segentle enough for baby's bottom then -- >> that's right. >> tom, thank you. >> tom falk, ceo of
detroit. chuck, you guys beat the street by a wide margin, and first thing standing out here are the margins themselves for north america. 11.8% for the quarter, and now you're expecting at least 10% for full year? that's a year ahead of time. how much of this is due to trucks and suvs and product margin you drive through those? >> well, clearly, phil, we're taking advantage of the market opportunities that present themselves, and a strong truck market and suv market is helping, but, also, it's our view and continued focus on cost efficiencies. look at the cost efficiency we had in the third quarter, overall, 700 million, a lot of that accrued to north america. i think it's seizing the opportunity from a market standpoint and driving efficiency in the business. >> you have a new uaw contract, who knows where it winds up. are you fighting that in terms of going up against the numbers
over the next couple years once the new contract is through? >> i think, first, you know, labor costs and what we end up from a uaw negotiation, i'm not commenting on that specifically, but the context, you any, as a percentage of the overall costs, labor costs are relatively small in the big scheme of things. we are committed to sustaining 10% mar gyps in north america over the next number of years, and, you know, to the extent there's head winds associated with the final resolution of the contract negotiations, we will work to offset those. >> chuck, talk about china. 463 million dollar profit. your margins went up despite the fact the market is contracting right now. do you lock at china and say we are in for a couple years where we might see sales growth overall in the low single digits? what's your outlook right now? >> yeah, as we talked about with the second quarter, phil, for the rest of the year, the year in total, we expected low single
digit growth from an industry perspective, low single digit percentage growth, 1-2%, that's playing out. se queen rl improvement through the third quarter, seen improvement thus far. looking forwards, we expect the industry to grow between 3-5%, but being more volatile. but we also said in that cop te conte context, we drive efficiency and the results in the third quarter prove our plan's working, half a billion dollars of equity income. as you said, 9.8% net mar gyp. >> cadillac is a push, and luxury overall is so strong in china for so long, but there's concerns that's going to be slowing down as a segment. can you still drive it with cadillac? >> sure. because we're coming from a position where we're really not present, and if you look at sales year to date, cadillac sales in china are up 12%, and we're not even, you know, in the heart of the launch cadence as we roll out new products and
expand the portfolio, not just china, but u.s. as well. >> chuck stevens, cfo of gm, joining us from detroit, guys, when they beat the street by a wide margin. >> phil, while you're here, shares getting slammed, midday yesterday, and worse than average reliability rating from consumer reports. that comes just two months after consumer reports gave the latest model s. >> that's what confuses people. two separate things. their review, giving it a 100, calling it the best car driven, that their auto team putting the vehicle through a set of tests on closed courses and reports for a minute up in connecticut. that's their personal view in terms of driving that vehicle. >> subjective at all, phil? >> oh, absolutely. >> can you get swept up in tesla? >> right. they say they don't get swept up, but anybody can be. now, this survey that came out
yesterday, those are tesla owners, and what the ordinary persons were saying is, here are the problems we notice with the vehicle, wide array of them, squeaks, rattles, problems with the charging equipment, and a wide variety, not one specific issue here. >> rattles may be the worst thing you could find. >> right. >> they drive me absolutely crazy. >> the people driving the car -- >> interestingly, these are the owners. two things here, dropped down to worse than average reliability based on those responses, yet 97% of the people said i'd buy one again. it's hard for people to wrap their arms around the significance of this, but there's no doubt. >> i have with to go, but we have to know the new sub driving stuff, who is the liability on? we're talking about the insurance of this. how does it work? >> it's the driver. still the driver. >> still the driver? >> still the driver, no difference in cruise control, and you say, oh, the cruise control did not work, take it up with the auto maker. you're behind the wheel.
>> that's interesting. that's another conversation. >> yes. >> coming up, harley davidson stock falls after missing earnings and announcing job cuts. the ceo joining us after the break, and coca-cola has results. digging through the report with an analyst in just a moment. (vo) what does the world run on? it runs on optimism. it's what sparks ideas. moves the world forward. invest with those who see the world as unstoppable. who have the curiosity to look beyond the expected
harley davidson with us, saying why the market is not high on the hog. behind the wheel straight ahead. countdown to a decision, vice president biden could throw his hat in the presidential ring any minute. plus, paul ryan reconsiders the house speaker position. john harwood has the washington watch. plus, ferrari revs up wall street. >> set to drop the green flag on the stock this morning, and owning a piece of the italian car maker. >> do you know many ferraris? >> no, no, no. >> what? >> in the garage. >> the final hour of "squawk box" begins right now.
live from the most powerful city in the world, new york, this is "squawk box." welcome back here to "squawk box" here on cnbc, first in business worldwide. we are less than 90 minutes from the opening bell on wall street, and this is where the futures stand at this hour, dow 65 points higher, nasdaq 20 points higher, and s&p 6 points higherment let's look at markets in europe at this hour. green groacross the board with up 6%, and cac up as well, and ftse up .50%. >> the stories, investors are talking about today, ferrari set to begin trading today. the luxury car maker pricing ipo at $52 a share at the top of the expected range. fiat chrysler sold 10% of the
stake in the offering. sergio is coming up on "squawk on the street." and rival is buying for $67.02 in cash and stock, roughly 10 million for the overall deal, a 24% premium to yesterday's price, stock catching up now, up by 15%. lam's ceo joins us tomorrow morning here on "squawk box," and in other deal news, western digital buys sandisk for $58.50 a share. >> stocks to watch this morning. boeing's earnings and revenue top estimates, company got a boost from an increase in commercial aircraft delivery. a nice move up 2.6% now. general mottors posted a profit of 1 .5 billion.
chipotle hit hard, missing the marker by higher expenses for labor, advertising, and promotion. >> coca-cola's stock on the move this morning. it was a mix of quarters for the company, earnings beat by a penny, but revenue fell short. joining us now with analysis is nick mode, and, nick, revenue fell short, but probably not a human surprise that currency was the impact. >> yeah, it's been an issue for the names, and good thing is that we're seeing a moderation in the movements of the currencies versus the dollars. into next year, things should be better, but it was an inline quarter, making good progress, underlying volumes did not change, we had weakness in the economies outside the u.s. >> but what do you think about the global case volume? up 3%? >> yeah, 3%, so we were ahead of consensus of 2.8, and, again, they aric 345ie making underlyi
products. coke is in a transition year. we're on the mistake there's momentum on volume price and earnings. >> what's happening in the transition? transitioning to way? >> yeah. they are consolidating the bottling franchise locally, getting volume to the best operators, helping momentum. enacting huge restructuring, new for coke, cutting $3 billion in costs, seeing momentum there and stepping up advertising spent, taking time to pay out on volume, and, again, 2016 should be a sweet spot for the company. >> if we're concerned about the global economy, why do you think they have pricing power and be able to rise prices that stick? >> well, you know, sometimes we forget coke is one of the most recognizable and powerful brands in the world, and what we've seen is that they take more pricing than anyone anticipated this year and volumes did not slow. there's evidence that coke has
pricing power in the market. >> what's the price tart right now? >> yeah, the price target is $47, and we'll review all of our valuation work in the earnings after the company's conference call. >> i noticed the biggest gapes the company saw in terms of s e salsal sales came in the still bev ramgs, not sparkling water or carbonated drinks. >> yeah, the key for coke is growth in sparkling. they did. 2% growth in the sparkling business, but reinvesting all the extra money into the still beverage, which is where consumers are migrating so coke is trying to go for the portfolio play over the coming years rather than just being singularly focused on carbonated soft drinks. >> thank you for joining us. >> you bet. >> motorcycle maker, harley davidson, hitting a speed bump missing on revenue and earnings in the third quarter, and now flat to down 2% for 2016. joining us now, the president
and ceo of harley davidson and our in-house harley expert morgan brennan. are you our expert on harleys? >> i say yes, why not. >> you know what else you are? just very proud to calling yourself a millennials. you have to play a millennial here and say why they are -- i don't know driving electric scooters or something? >> part of the solution. >> better be. >> absolutely. >> i understand what happened before the financial crisis, everything is great, harleys are great, 75 the stock. that becomes questionable because it's a not necessarily a dream buy or luxury, but tough. it went down to, like, into the teens. >> low teens. >> now we got back year and a half ago, back to 75, now back to 48 in an improving economy, so something seems different,
and you're the market leader. how do you grow when you are already beating everybody else? >> so, a great question. coming from the down turn, actually, we picked up 13.4 share points, and everyone just retreated from the industry. we knew we were going to give some of the share back. that's what you see this year. it's been a tough competitive year for us. certainly, what's embedded in the price today is disappointment from the third quarter and competitiveness that we faced year to date. the big part of the determination that we have in the company is to pivot, you know, from our interim restructuring efforts, that have been incredible successful delivering incredible growth margin performance from the plants and product development, pivoting to investing to grow demand globely, and that's the big news yesterday. i don't think it's picked up by the street yet, have not proven it yet, so that's ours to do over time, but we're very optimistic about the prospects, about the potential, and about our actions to make a difference
in the marketplace and maintain our leadership position and grow the sport of motorcycles. >> i remember five-ten years ago, indian would be a threat. is it now a competitive threat? >> they are in the market, part of the mix in the united states which is two thirds of the business. indian is in the market. they are a factor in the competitive pressure we face, but every one of our competitors, primarily the foreign competition, is really what we're facing that they benefitted from this rapid appreciation of the dollar that really started in the fourth quarter last year, and we immediately saw a shift in consumers towards those motorcycles because -- >> that much cheaper, yeah. >> so we're facing that we're also from a pnl perspective facing the loss and profitability that comes from the non-u.s. sales because we are predominantly u.s. manufactured and u.s. costs. >> i didn't think about that. domestic companies are protected by this, but when you compete with guys from overseas and you make things in the united
states, that's a big hit. >> the direct pnl effect of the nine u.s. sales is immediate and clear. it's mass. the indirect effect is harder to see, and that's what we saw with all competition other than the indian product that is benefitting from the currency advantage. do with it what they with, price, promote, and they are different doing things, and that affects our give back to market share year to date is three points after growing 13.5 out of the downturn. we're not happy about it. our actions are all about, you know, planting feet and saying enough. we're a leader in the marketplace. we got over, you know, 50% of the market in the united states, and we need to put our foot down, defend that leadership position, and, also, invest to grow the sport of motorcycling here and our reach and impact globally. >> a viewer -- oh, go ahead. >> i want to dig in more because it's the market share drives demand, represents a shift, a strategy shift for the company. >> yep. >> talk about stiffer
competitions, lower price, more motorcycles coming in at steep discounts. you had recalls this year. why not slash prices? yesterday, you talked about maintaining brand premium, why this shift? >>. >> what harley davidson has up like any other company that i'm aware of is incredible brand loyalty and the trust we maintain with the riders, longevity and loyalty is undermine when you reprice products. our focus is increasing value, the value of the experience, the content of the product, reasons for people to stay with harley davidson, that's an up rivalled strength under appreciated, frankly. >> we have polaris results out today. is that the biggest threat? >> auto cycles? >> yes. product-wise. >> we see it as a strange thing, and i don't know the market size. we don't view it as a choice between a motorcycle and au
autocycle. it's in the numbers and industry data as a motorcycle, but we don't view it -- >> like an air bag, why do you need a third wheel? >> it's a dune buggy. >> because i'm the my len ideal here. >> you are. >> there's still -- you are pushing away from this, you know, out past this, but, i guess, image, brand image, but there's an idea of harley davidson, guys in leather, sons of anarchy, cruisers, baby boomer, core drivers, how are you reaching out? >> this is a great question, morgan, thank you so much. we love our demographic, right, incredible strength with white males 35 and older. we have incredible lead in all segments, nine times with core, and nine times the next competitor with caucasian females in the united states. three times the nearest competitor with young adults.
young adults of all genders and ethnicitie ethnicities, 18-34 three times the nearest competitor. we've grown the outreach sales this year 7%. we've grown them more than our core sales in the last four years. there's a lot of things going into doing that, but the track record on outreach performance is really phenomenal, and it's sort of quiet and under the radar, but it's very important in dmemonstrating capabilities o reach new customers here in the united states, globally, product, promotion, how dealers treat different customers walking into the dealership. here's morgan, how do you treat her? she's a millennial woman. she's not your typical customer, maybe, so the dealer engaugement. >> just to look up from the iphone long enough to see the, you know -- >> well, but -- i put it down once in awhile.
that's interesting too. what you mentioned is e-commerce, idea of selling motorcycles online. >> not motorcycles. >> not motorcycles. >> but the other products, accessories and so forth. how do we increase access to the brand, okay, as well as the motorcycles, as well as the other products in the united states and ashlround the world china we don't have the markets of distribution, how does this play a role in engaging. >> i have to take it down a notch, but we have a viewer, an ex-employee of the company, talk more about the job cuts and who is going to be hit by that, and how you are thinking about what's happening there. >> you know, this is a tough subject. i just spent, you know, all day yesterday after the earnings announcement talking to our employees. we had app employee video. we don't like to make the changes that affect people's lives. it will be approximately 250 salaried positions that will be reduced. a similar number of contracts. many of the positions are actually open. so the affected people, we think
sth fewer than 250. it is due to refocusing and restructuring of the commercial operations, but every part of the company is looking for ways to figure out how we can -- >> is it one group or another that's going to be hit more than the other, or is -- how are you -- >> i would say wee believe the majority of those affected positions will be out of our headquarters, but there were be people in the regions, around the world, as well as manufacturing product. >> what's the total employees? >> salaried employee is 3700. 250 on that base. >> okay. >> yeah. >> all right. so you don't want the sops -- you don't want to market to the sons or you don't want them buying other bikes, do you? >> i don't want anyone buying any other motorcycle. >> it's a love-hate. you don't want -- sons were
involved in bad stuff, i admit that, but if they didn't drive harleys, i would be disappoi disappointed. >> so would i. >> that's the harley sign. ? right there. >> you ran out of thread? >> the red? >> couldn't put -- >> this is the millennial logo. >> exactly. don't flaunt it. so you are -- >> don't flaunt it. >> you can't flaunt it. >> not too brandy. was that your idea, morgan because you're the harley and millennial expert, that's a good combo. >> it's the double duo, fantastic combo. >> i agree. >> thank you. >> appreciate it. >> thank you, morgan. >> appreciate it. >> i have -- >> i don't want to keep coming here and hear you speculate. >> if i still lived in boulder, guarantee you i'd have a harley. >> do you have a side car? >> i'm going to take andrew. we're going to do it, little buddy. >> when is the electric motorcycle. >> self-driving motorcycle? >> nobody wants that. who wants a -- we like driving.
>> elam musk may get there first. i don't know. how are investors feeling about the current market environment and what's weighing on the decisions? find out after the break, and later, investors race to ferrari to investment. is it a winner for shareholders? a look at the luxury car maker in a bit. squawk returns.
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welcome back, a read on market conditions now, the vice president at the association of individual investors and editor of the aaii journal. good morning. give us a read on how we should befeeling. >> depends on who you ask. 38%, bulls sentiment rebound and pessimism dropped, but i think not -- what numbers are not showing, is it's really mixed. we did have members who bought on the dips, say they bout when the markets pulled back, and we had other members who went to cash. they are staying out, and i do think, however, that the markets
have rebounded over the past couple weeks. has generally improved, moved, and if nothing else, they have been confirmed that a bottoming has been set in, and that we won't see this correction turn into a bear market. >> how much do you think this is driven by the fed? >> you know, the fed -- it's -- dependent. some of the members think it is helping the economy, but a lot of the members are either retirees or near retirement, so versus viewing the fed as helping the economy, they are actually frustrated because it's keeping interest rates low, and as a result, it's hurting their savings. >> hey, charles, question for you. you know, you mentioned that people are feeling better. the dow's up 6% in three weeks. how much of this is just we feel better when stocks are up and feel worse when stocks go down? >> i think that definitely plays a role. a recent bias basically projected current trends in the future plays a big role, but i think there's also just a big sigh of relief. we look at the numbers, we've seen bear sentiment drop by
nearly 13 percentage points from just two weeks ago, so i think there is a sigh of relief that we tested the august lows, but we did not go lower, and had we gone lower, perhaps we would have been talking about a little different sentiment numbers right now than we are. >> can you speak to -- the reason i asked the question about the fed, going into, like, you look at your numbers over the summer when there was an expectation perhaps that the fed was going to raise rates in september, what was the sentiment like then relative to what happened afterwards, and then it speaks a little bit to where becky was going with this, which is, right now, obviously, people feel better. >> yeah. i don't think the fed's really playing a role so much as much as the market is. a lot of the members actually want rates to be raised, either because they want the higher interest rate in the savings accounts, others a general sense, got over with it, and the members feel the angst over when the federal rates raise is doing more harm than just raising
rates. >> terms of sentiment, over the next 12 months, what's the feeling? >> yeah. really, that depends on who you ask. i think if we can get some better economic growth, that's really going to help sentiments, more than anything else, and i recently asked members, what do you think about growth? they used words like sluggish, anemic, slow. i think the big thing is really do we get better economic growth? do we get better earnings growth? people want to see top fly revenues grow, not just earnings. they want to see earnings driven by actual sales. >> did they say anything about china or europe or is it all domestic? >> no, it's not all domestic. some of the members are concerned about china. that's actually raised by the members, the concern about the slowing of china, and what impact that'll have on u.s. companies, both in china and, obviously, worldwide. >> okay. thanks so much. >> thank you. >> you have a lot of crazy ideas.
a lot of them. >> i know. >> craziest idea ever. you never owned a motorcycle. >> i have ridden a little moped. >> the idea of a self-driving motorcycle -- you know, leaning into a turn. >> this conversation -- >> you can't possibly. >> this is andrew saying -- >> a self-driving motorcycle? >> self-driving mock. >> no onemen menwants. you ride on a motorcycle. >> it's like a segue. >> andrew, you -- no one would want a self-driving motorcycle. >> all right, folks, weigh in. tell us on twitter. >> parents listen up, everything is not
. welcome back to "squawk box," parents, listen up, a lego shortage is coming. bad for our family, factories at full speed, but companies are having a tough time keeping up wi plastic brick demand. sales overtaking barbie. they declined to specify which lines of toys are affected. they hope a new factory set to come online helps with demand, but it's not expected to open until 2017. >> black market for the legos just in time forle holidays. >> it's in europe, though, not
the u.s. >> integrated circuits, do those look hard? >> max is now doing robotic legos. >> i know. they ought to ramp up that. they don't have the capacity, but it's not a high-tech toy. i think you can print those on a printer, 3-d printer? >> would take a while. >> i told you about pley? netflix for legos. there's conditions under which they seek to become the speaker of the house. talking about that when we return.
after companies made european governments declared illegaling and starbucks says they are appealing the ruling, and toyota recalls 6 million vehicles to fix an issue with a power window switch, and 2.7 million is in north america. they are not aware of accidents caused by the problem. >> biogen out with earnings, and the cancer society issued new mammogram guidelines, and we have more on a reversal from the grouping right, meg? >> yeah, just more confusing on mammograms. earnings update quick on biogen this morning with the beaten raise. both on top and bottom line, and company announced restructuring to cut 11% of the work force. that driving shares up in the early hours, and despite all announcing a phase three trial of a drug that failed in a less common form for multiple sclerosis. over to abbot. both on top and bottom, far
lowed in the full year, emerging markets, the company announcing more than 20% growth there, and so looking pretty good, although, overall, results impacted about 9.5%, and moving over to the american cancer society guidelines on mammograms, joe, as you mentioned, a reversal there. the company or the organization recommended mammograms starting at age 40, now saying women 45-54 should gannual mammograms for women an average risk of breast cancer. now saying that clinical breast exams are not recommended, just mammograms, joe. >> that's troubling things the other day, meg, only 10% of breast cancer is genetic. that was not -- the way it's characterized, it doesn't tell the whole story. i guess they are talking about crc positive awhatever, right? >> yeah. i'm not totally sure on that
statistic. i can check on -- >> once we find out more, you find a lot of other genes, so, you know, makes it sown like it's all environmental and only 10% are exposed to it when the general media got the wrong conclusion from that. we identified that and it works on people with that gene and maybe not on other things, but -- >> angelina jolie. >> right. >> there's a lot of other marks, hopefully about breast cancer. >> i think the issue with the clinical breast cancer ones is that you can't detect those. they -- the mammograms pick it up before you can feel them and see what's going on. >> right. ? that's -- >> that ultrasound -- >> but groups have different guidelines on this. >> right. >> i know. >> right. all right, meg, thank you. >> thanks. >> we are expecting a decision from vice president biden on a presidential run, and paul ryan is ready to run for house speaker, but only under specific conditions. our chief washington
correspondent john harwood is here to wrap it up. paul ryan, john, threw down the gauntlet to the right wing of the party saying i will do this, but only if you support me. turned it on its head because they said the same to him. >> that's right, and they have the issue to do that because he's wanted to take the job, wanting to be the ways and means chairman, a much more influential job than speaker on things he cares about the most. i'm not sure that the people on the right, and i don't know -- i don't think right in terms of the ideological spectrum is the right way to think about it. >> i don't either. >> emotional intensity of the caucus that is frustration, antigovernment, and, you know, same things that make them unhappy with john boehner will likely make them unhappy with paul ryan doing the things a speaker that has to do. >> there was grumbling yesterday. >> on particularly on the issue of immigration, which is
interesting because cultural identification is the powerful thing more than taxes and budgets and entitlements and all the things paul ryan made a career on. my guess is in the end that he gets enough assent to do it, but i don't think he wants it that badly, and i'm not sure that it's going to solve the republican party's problems. >> weird you characterize the far right because you know that space supposedly circles around on itself, and you can go so far right you end up on the left. they are antitrade. berpny and the freedom caucus has the same true on trade. how does that work, john? >> works in an emotional level because there's a lot of people in the country who are upset at the way it's changing, culturally, the demographics of the country, and the fact that the economy for a certain group of people, especially people who have not graduated from college,
their living standards have not gone up, living standards not up, trying to figure out -- nafta, they can blame it on eve. blame it on the rich guys on wall street they think rig the game and stupid pew politicians steal it from them. >> back to the paul ryan thing a second. in the end, you said, he's not sure he wants it that badly. what's it about? >> i think it's about -- >> just a show to say he tried? >> no. i think it's about paul ryan actually being willing to serve the party. >> saying that he's not -- i couldn't -- he's genuine in interest? >> i wouldn't describe it as interest. i would say that the party is in a crisis right now. >> he's the only one that can do it. >> everyone is turning to him. when you look at the caucus, there's 247 people in the caucus, but the people causing
the most intense problems is 45, something like that, all of the rest are warm towards paul ryan, people who want to make government work, and they are saying, please, we think you can help us out of the box, and so he's trying to respond to the friends. >> right. and serve his country, but he doesn't want to do the fundraising, but he wants to do the stuff do at ways and means. he said that. >> that's what's interesting about it is that he has young children. >> yes, wants to spend time with them. >> we all talk all the time about issues of work and family balance and everything, and when people beg you to take a job and you hold the cards saying, okay, i'm going to be with the kids, not traveling for fundraisers all the time. >> i respect that a lot. glad to see it. >> yeah, absolutely. >> the question we ask every day, is the day today that joe biden declares? >> i don't know. i don't see a logic to a particular day, not timed around the benghazi testimony or
anything like than. >> is there a last day? an actual date? >> look, the last day has been going by slowly anyway. the longer you wait, a nondecision is a decision not to run. the narrow -- the window keeps closing. i mean, ultimately, there's some date at which if you're not on the ballot in enough states to win delegates to win the nomination, but i don't know when that date is. i think joe biden is in the very last stages of this. everybody's dissecting whatever he says publicly, as you guys know because we've talked about it over and over, and i think in the end, he will not do this. my goes is is that we're not going to get through another weekend without more. >> john, are you sure that the obama administration is not sort of urging him? you sure that there's not a preference there, still some bad blood, she's not going to do tpp
-- 91 -- whatever hillary clinton says, discount it. i got to remember that. i got to remember that. how could i forget? but -- where was i going? oh, 91% of obama bundlers have not raised money for hillary clinton. joe's latest thing about how i went with the vice president biden's latest thing about i went upstairs with the president and told him i was backing the osama bin laden raid. >> interesting. >> but the only person says that's not true is the president, if it's not true, saying there's three -- gates wrote a book and someone else wrote a book, and hillary clinton. all saying to wait and we didn't have the evidence. only the president knows. and then josh earnest yesterday, you know, doing a weird dance about trying to explain whether joe was able to say no, you know, i don't want this guy in the cabinet. just looked like -- they are
close. he said it's the greatest public servant that -- best decision i've made. you sure that he doesn't want biden to run? >> well, look, i'm not sure what's in the president's mind. i don't think so. that's not the vibe i get from the white house or from people in mopolitics. he needs a democrat legislated to succeed him i believe the judgment taken is that it is most likely that that person would be hillary clinton. she would have the best chance to win the white house of any other democrat incoming biden, and he is loyal joe biden very much so. there's loyalty to hillary clinton too serving him in the administration, and i'm not sure he's upset about the ways in which she's broken with him. he gets the game. he played it himself in 2007 to renegotiate nafta. come on. >> john, thank you. >> you get. >> you got questions ready?
>> working on it. >> constantly. >> you wouldn't believe the work we're putting in. >> i do believe it. i hear about it. i gave her the best question. >> give her the day off to focus. >> afraid to ask the questions. >> it is a good question, but i'm not going to ask it. >> you'd be famous. >> catch the next gop debate here on cnbc wednesday, october 28th. >> i'll say it right here. >> no, don't. >> i'm not. ferrari starts trading day under the ticker race. cars and stocks after the break.
watch out, hello, woah. >> ferrari ipo debuting this morning under the ticker, race, and i think they thought robert frank goes up from there. leave something on the table, i think. let's get to him, the ferrari is parked outside the new york city stock exchange, oh, not the ones there every day, but these are the hoopla not just surrounding the fat cat hedge fund guys, but these are buy the company. >> reporter: nothing goes together better than wall street and ferrari. the race is on today, joe. expected to trade today at $52 a share, could be higher from there. it is scarlet fever here in the exchange. we talk about the valuations.
we talk about the financials behind the deal and how it's richly priced, but it's the cars, the sex appeal, the emotions. the cars they have down here, this is right now that red one, the 488, the newest model from ferrari starting at $250,000. the waiting list for that car is over two years right now. we've got the starter ferrari, the california t. that's around $200,000 to get into that one without much options. your can't talk about ferrari without the classic prices and value that this brand has over time, this 1961 swb, they sell for over $10 million speaking to the durability of the brand and why it's treated as a luxury stock than a car company, andinan remember, ferrari was a racing company that built road cars to fund racing. this is the latest formula 1 car, and that's the cream de la
cream. we hope to speak today with sergio, son of enzo ferrari. he will be a billionaire as of today. for perspective how exclusive they are, over the entire history, ferrari produced around 200,000 cars, about what porsche makes in a single year. question, of course, now is whether that exclusivity remains now that shareholders are going to demand higher growth, higher productivity from the company. guys, back to you. >> which two cars do you have to buy? you have to buy three ferraris to buy the la ferrari? any two or spefcific ones? >> reporter: customers tell me they like you to buy the ff, that four-seater that you love that your dogs fit in, that's the silver one back there, what you drove, i think, with andrew. >> yes. >> reporter: the might be able to fit in the backseat of that. that is the less popular models. buy a few of those, a chance of
getting this other is a lot better, but even these la ferraris are back on the open market for over $5 million. >> yikes. >> you see the price just in one year. >> that's a problem. >> robert, do it again. you say it very well. >> la ferrari. >> that's the big slogan they say on the racetrack. go fer rar pi. >> all right. great. those are -- >> francesco. remember that from "cars"? and i was thinking al pacino's wife. la ferrari. coming back -- coming up, rather, when we come back, jim cramer from the new york stock exchange with thoughts on ferrari as well r and futures before the break, there are green arrows across the board, dow opening 57 points higher. back in a moment with mr.
let's get gown to tdown to the stock exchange. coke jumps out as one that fits in this trend of beating on the earns per share expectations but revenue coming in lighter an expected and currency is a big head wind. >> coca-cola is fine. i think once again it's a decent job. the rate of decline of diet sodas looks like a little better. the organic is a little better. is it exciting? no, it's not exciting versus a kimberly clark that you talked about this morning where the numbers were quite a bit of a turn, and yet it doesn't seem to matter. the real excitement is all takeover today. i thought the excitement would have been kimberly going to 120 because it was one of the great accelerations in consumer package goods. there was an acceleration in pepsico. it's case by case in consumer package goods. very difficult to follow. >> we had the harley-davidson ceo on, too. i hadn't really thought of harley being a company that would be affected by the stronger dollar because you
think of them selling in americans made in america but that's their problem. they're competing against foreign companies that are bringing in products and able to discount them pretty heavily. >> at a republican convention you would think people would understand that some of our industries are just being decimated by this weak yen. because of the numbers we're seeing in japan. but that yen could weaken even further and a company directly impacted would be harley. it looks like they've also under invested. i would like to think it's such a brand name that the japanese can't come in and take share. but our treasury secretary is uniquely tone deaf to how other kuns are building their industries, which is taking our industries. i hope we can at least have someone say we're not going to tolerate this anymore and it's not just the chinese, many of these developed countries that have decided to decimate some of our industries. the motorcycle industry is a prime example. >> is that a reason for tpp it not go through, jim? because there are plenty of
people on the right and left who don't want to see tpp. >> we lose on every trade deal. that's something else the president never accepts. there hasn't been a trade deal that's ever produced a surplus to us and it's name to relook at nafta because it's killing our industry. who is standing up for the american worker? which party is standing up for the american worker? absolutely none. this is just all about taking share away from our companies. we're moving to mexico where you can do $5 an hour instead of $112$22 an hour. when is anyone going to wake up in washington. it's been going on systematically. this is about crushing us and no one seems to care because they seem to be so happy the china market is open to hair conditioners. >> jim, you're talking about some serious issues. the idea of even renegotiating nafta, changing the deal we have with two of our biggest trading partners, canada is our biggest and i think mexico falls in three, is it? >> do we want manufacturing jobs? these are the jobs that you have when not everyone goes to
stanford. if we want everyone to go to stanford and do computer engineering, that is super, we will beat everyone. if we want people to go to a state school, community school, not necessarily finish first in class and be able to have a job, we have to protect our industries. >> protectionism is something that goes against -- >> neither party is talking about it. >> bernie sanders is talking about it and the far right is talking about it, too. you have people like donald trump who say they would renegotiate a lot of these issues, that they would be a lot tougher with some of these partners. >> you're not supposed to say anything about trump. can i say trump is focused on this issue, actually talking about it, but i guess we're supposed to talk about hedge funds and carried interest. look at harley. you listen to the interview and you say enough japan but who is saying enough japan other than harley? nobody. what kind of market is this where we say we're going to devalue the euro and buy ferraris and foreget about luxury cars at ford. we don't even care. these candidates are so removed about what we should be talking
about. >> you think the fed will have to sit at zero interest rates because of a lack of action in washington, that it's left to the fed to try to -- >> it's entirely about washington doing nothing. that's why it's so hard for them. no one wants the fed to be able to play this role. paul ryan understands it. he says someone has to think about the worker. i just favor the american worker and none of these guys seems to care whatsoever. these jobs get taken away to countries that pollute to heck, we end up having the pollution in our country, they take our jobs and everybody is happy because we want to talk about benghazi. okay, benghazi, fabulous topic. >> jim, we need to continue this conversation but they are playing us out. >> i can't wait to get the debate, becky. maybe we'll knock some heads together and finter find out what the hell is going on. >> see you later. new york buzzing about october baseball and tickets for "star wars" hit light speed. details after the break.
times as many tickets as it did for "the hunger games." movie theaters were adding more shows as fans rush to secure seats for opening night. demand was so high several online ticketing services actually crashed and believe it or not, some tickets were showing up on ebay with one pair of vip tickets offered for $10,0 $10,000. >> isn't darth vader dead? >> yes. >> don't give it away. >> he's been dead for a while i think, eons ago. >> generations of new -- >> who haven't seen it. >> my sons have sooeen it. >> do they know he's luke's father? >> they do. >> kyle even says, hey, is that like luke skywalker? >> what's his name, begins with a "z," but he says -- >> who? >> the new york mets --
>> i'm going to destroy you. >> you're done. i'm done. >> we kind of are done. >> do you think these guys are trying to advertise on our show right here? the moving and storage company right behind you? i thought they were trying to get in your shot. >> have a great day. join us tomorrow. right now it's time for "squawk on the street." ♪ i can't drive 55 >> a legendary automotive brand comes to wall street. ferrari making its public debut at the big board today. we're going to bring you all the action, including the first trade and a live interview with chairman sergio mar chone. good morning. welcome to "squawk on the street." the premarket is watching earnings from coke, gm, boeing, biogen and a lot more. china took a spill overnight, down 3%-plus, the biggest decline in a